Economy

73% of Nigerians Would Put Spare Cash into Savings—Report

Published

5 years ago

30/08/2019

By Dipo Olowookere

A new report released by Nielsen Africa, which measures Consumer Confidence Index (CCI) in some countries on the continent, said things were not to rosy for Nigeria in the second quarter of 2019 because the country’s index slightly increased by one point to 127 unlike its West African neighbor, Ghana, which gained 10 points to settle at 118.

The 127 points reached by Nigeria, according to a summary of the report made available to Business Post, remains the highest confidence level for the country since the first quarter of 2016.

“Following a turbulent period in its history, Nigeria’s economic recovery is gaining momentum with GDP expected to grow slightly to 2.5 percent year on year, off the back of moderate improvements in net exports and domestic demand. Nigerians are optimistic about their future and this is reflected in the confidence scores,” Nielsen MD for Nigeria, Mr Ged Nooy, commented.

Looking at the consumer picture, Nigerians immediate-spending intentions have shown a healthy increase; with 54 percent of consumers versus 46 percent in the previous quarter saying now is a good or excellent time to purchase what they want or need.

However, their perception around job prospects have slightly declined, with 60 percent viewing them as excellent or good, a nine-point drop from the previous quarter.

It was stated that sentiment around the state of personal finances has shown a slight improvement with 82 percent Nigerians agreeing their state of personal finances will be excellent or good over the next year, a one-point increase from the previous quarter.

Looking at whether Nigerians have spare cash to spend, 51 percent said yes, versus 55 percent in the previous quarter.

In terms of their spending priorities, once they meet their essential living expenses, 76 percent would invest in home improvements/ decorating, 73 percent would put their spare cash into savings and 66 percent say they will invest in shares/mutual funds.

Surprisingly, in light of their propensity towards savings and investment, the lowest number 39 percent said they would put their spare cash into retirement funds.

Looking at the top concerns for Nigerians over the next six months, work/life balance tops the list with 27 percent (a six-point increase compared to the previous quarter) and has displaced political stability as the number one concern for Nigerians.

This is followed by increasing food prices at 22 percent (a one-point increase compared to Q1’19) and the economy at 20 percent (a four-point increase compared to the previous quarter)

Elaborating on these results, Mr Nooy said, “Nigerian consumers are positive and open to spending, however, the country’s retail environment continues to feel the effects of steep inflation. Manufacturers and retailers will therefore need to tackle this challenge head on, to harness the true value of Nigeria’s powerful consumer base.”

On the part of Ghana, its CCI for the second quarter of 2019 showed an extremely healthy increase of 10 points to 118.

Looking at Ghana’s overall performance, Nielsen Market Lead for West Africa, Yannick Nkembe said, “Ghana is currently the poster child for African economic growth and positive consumer sentiment. The International Monetary Fund estimates its GDP will rise 8.8 percent this year – double the pace of emerging economies as a whole, and well ahead of world growth.

“This is a result of factors such as expanding crude oil production, a stable democracy and the introduction of a more favourable taxation structure. Ghana’s manufacturing industry has also been boosted by policies aimed at diversifying the economy and preventing an over-reliance on the commodity markets.”

This overall positive outlook is reflected by Ghanaian consumers’ greatly improved view of their job prospects, with a 10-point increase to 63 percent, saying they will be excellent or good in the next six months.

In terms of the state of their personal finances over the next 12 months, 74 percent say excellent or good up from 70 percent and the number of Ghanaian consumers who feel now is a good or excellent time to purchase has also seen a large increase quarter on quarter, from 34 percent to 46 percent.

Looking at whether Ghanaians have spare cash, 52 percent say yes, up nine points from the previous quarter. Once they meet their essential living expenses, the highest number of consumers (82 percent) put their spare cash into savings, followed by 72 percent on home improvements/decorating and 67 percent who invest in stocks and mutual funds.

When looking at the real life factors that are having a negative impact on Ghanaians outlook, the top concerns over the next six months include work/life balance at 24 percent; the same figure as the last quarter, rising food prices at 22 percent (dropped by three points compared to Q1’19) and tolerance towards different religions, also at 22 percent (increased by one percent since the previous quarter), and children’s education and welfare at 18 percent which has seen a 2-point increase.

Economy

House of Reps Passes MTEF-FSP For 2025-2027

Published

7 minutes ago

27/11/2024

Adedapo Adesanya

By Adedapo Adesanya

The House of Representatives on Wednesday passed the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the next three years (2025-2027).

In passing the MTEF, the lower chamber’s committees on Finance, Petroleum Upstream, and Petroleum Downstream were tasked to investigate reports from the Revenue Mobilization, Allocation, and Fiscal Responsibility Commission (RMAFC) alleging that the Nigerian National Petroleum Company (NNPC) Limited’s withheld N8.48 trillion as claimed subsidies for petrol.

Additionally, the investigation will address the Nigeria Extractive Industries Transparency Initiative (NEITI) report that claimed the NNPC failed to remit $2 billion (N3.6 trillion) in taxes to the federal government.

The committees were further directed to verify the total cumulative amount of unremitted revenue (under-recovery) from the sale of Premium Motor Spirit (PMS) by the NNPC between 2020 and 2023.

Some of the recommendations in the MTEF as adopted by the house are; that the projected oil benchmark prices are $75, $76.2 and $75.3 per barrel in 2025, 2026 and 2027, respectively.

Three-year projections for domestic crude oil production are 2.06 million barrels per day, 2.10 million barrels per day and 2.35 million barrels per day for the subsequent years of 2025, 2026 and 2027.

The country’s economic growth rate forecast, measured by the gross domestic product (GDP) was put at 4.6 per cent, 4.4 per cent and 5.5 per cent for the years 2025, 2026 and 2027, respectively.

Economy

Petrol Station Owners Lament N75 Price Difference Between PH, Dangote Refineries

Published

3 hours ago

27/11/2024

Adedapo Adesanya

By Adedapo Adesanya

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has said the price of Premium Motor Spirit, also known as petrol, being sold by the old Port Harcourt Refinery, which resumed production on Tuesday, is N75 per litre higher than that sold by the Dangote Refinery.

This was revealed by the association’s Public Relations Officer, Mr Joseph Obele, during the official reopening ceremony of the refinery, which is now operating at a capacity of 60,000 barrels per day.

Business Post reports that the lifting price of Dangote’s petrol product is N990 per litre. However, the refinery announced a N20 discount on Sunday, which is only available to marketers buying a minimum of 2 million litres of the fuel.

Mr Obele, a former chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN) at the Port Harcourt Deport who initially applauded the federal government for revitalising the old refinery, expressed concern over the pricing disparity between petrol supplied by the Nigerian National Petroleum Company (NNPC) Limited and the Dangote Refinery.

According to him, while Dangote Refinery sells petrol to marketers at N970 per litre, NNPC’s price stands at N1,045, a difference of N75 per litre.

He said the N75 price differential is a steep margin for businesses, particularly for an industry where profitability hinges on competitive pricing.

However, Mr Obele described the refinery’s restoration as a significant step in reducing Nigeria’s dependence on imported petroleum products.

He revealed that the Group Chief Executive Officer of NNPC Limited, Mr Mele Kyari, has promised to address the issue and harmonise prices to mitigate the impact on marketers and consumers.

The reopening of the Port Harcourt Refinery I is expected to enhance local production capacity and reduce reliance on imports, a move welcomed by stakeholders across the sector.

However, concerns over pricing disparities underscore the need for continuous reforms to stabilise the downstream sector of the petroleum industry.

The reopening has also sparked anticipation for the rehabilitation of other state-owned refineries including the second refinery in Port Harcourt as well as the Warri and Kaduna structures.

Economy

Cardoso Targets Ease in Inflation, FX Pressures By Q1 2025

Published

4 hours ago

27/11/2024

Adedapo Adesanya

By Adedapo Adesanya

The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, has said the lender’s efforts to tame inflation and pressures on the foreign exchange market will begin to yield results by the first quarter of 2025.

Mr Cardoso spoke during a press conference in Abuja to announce the outcomes of the two-day meeting of the Monetary Policy Committee (MPC) which raised the Monetary Policy Rate (MPR) for the sixth time by 25 basis points to 27.50 per cent.

He said the apex bank is using every possible strategy to tame inflation with a firm assurance that ongoing monetary tightening measures, which it has done six times alone this year, will have a favourable outcome.

The CBN rationalised that the 25 basis points hike is targeted at addressing rising inflation, which stood at 33.88 per cent as of October 2024.

“The central bank is resolute and committed to continuing to fight the war against inflation and there is no going back on that.

“We are going to deploy everything in our arsenal to ensure that we are able to tame it. And of course, this entails the return to orthodox monetary policies,” Cardoso stated amid agitations of rising interest rates on the economy,” the central banker said.

According to him, the Committee was unanimous in its decision to further tighten policy, though members took a decision to retain the asymmetric corridor around the MPR at +500/-100 basis points; Cash Reserve Ratio of Deposit Money Banks at 50 per cent and Merchant Banks at 16 per cent; as well as the Liquidity Ratio at 30 per cent.

He also said the MPC was particularly concerned that all inflationary measures also inched up on a month-on-month basis, suggesting the persistence of price pressures, with attendant adverse impacts on the income and welfare of citizens.

Despite this, Mr Cardoso’s tone was optimistic, forecasting that current measures would be able to tame prices in coming months due to lag effect.

“It is important for people to understand that there is a time lag between when you implement policies and when they have an impact. That time lag can be anything up from six to nine months to even a year. Our own perspective is that we expect to see greater results in the first quarter of 2025.”

He said in addition, that the apex bank is working very assiduously with some of the relevant agencies to ensure that structural impediments to growth are handled appropriately.

“We are ensuring that we are on top of the game and that the foreign exchange market operates at its most optimal manner to reflect the true value of the currency, and of course, we have price discovery.”